Asia’s biggest Internet company is among the most issuers in the region set to sell dollar-denominated bonds in a single day since January.
Tencent Holdings Ltd., Sinochem Corp. and Korea Expressway Corp. are offering debt in the U.S. currency, according to people familiar with the matter, who asked not to be identified because the matter is private. Kasikornbank Pcl, Thailand’s second-largest listed lender, and Union Bank of India are marketing 5 1/2-year securities, other people said.
Companies from China to India are offering notes after yields on dollar bonds for Asia’s issuers, not including Japan, fell to a 10-month low of 4.97 percent on April 14, according to JPMorgan Chase & Co. indexes. Borrowing costs were 5.02 percent yesterday. The most companies are poised to sell securities today since Jan. 8, according to data compiled by Bloomberg.
“There is still ample liquidity in the market and there is pent-up demand given the lower issuance ahead of the Easter long weekend,” said David Lai, investment director in Singapore at Eastspring Investments, which had $100 billion of assets under management as of Dec. 31. “Interest rates are still low so, if borrowers wait longer there will be even more uncertainty and rates could go up.”
Tencent is offering three-year notes at about 140 basis points more than Treasuries and five-year debt at a spread of about 185 basis points.
Sinochem is selling five-year debentures at about 175 basis points more than U.S. bonds. Korea Expressway, the country’s highway builder, is offering a three-year note at a spread of about 100 basis points.
Kasikornbank is selling its securities at about 200 basis points more than Treasuries, and Union Bank of India is marketing a similar-maturity bond at a premium of about 290 basis points, people said.
Woori Bank Co. hired banks as it considers offering Basel III-compliant dollar notes, according to a person familiar with the matter.
The cost of insuring Asia-Pacific corporate and sovereign bonds declined today. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 1 basis point to 120.5 basis points as of 8:35 a.m. in Singapore, Australia & New Zealand Banking Group Ltd. prices show. The gauge is on course to decline to the lowest level since April 10, according to data provider CMA.
The Markit iTraxx Australia index decreased 1.25 basis points to 97.25 as of 10:33 a.m. in Sydney, according to Citigroup Inc. The benchmark is on track for its biggest one-day drop, and lowest close, since April 10, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index was little changed at 84.25 basis points as of 9:32 a.m. in Tokyo, Citigroup prices show.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities should a borrower fail to meet its debt agreements.